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Euro, Stocks Dive As Cyprus Bank Run Follows Bailout Levy



NICOSIA – Global markets tumbled Monday as new doubts spread about the solvency of the eurozone with the Cypriot government preparing to impose a new levy on bank deposits in order to qualify for bailout funds.

Finance ministers in the eurozone Sunday had demanded that Cypriots pay up to 10% of their bank deposits in exchange for 10 billion euro bailout package. Panicked residents of the Mediterranean island nation began withdrawing their money from their accounts to avoid being hit by the levy, which would take effect this week.

The latest events have shaken investors, who fear such a bank run could be repeated in other troubled European economies. Shares fell in both Asia and Europe as the trading week opened, while the euro plunged nearly two percent at its lowest moment Monday.

“Traders and investors are aghast as these measures,” said chief market strategist at CMC Markers in Sydney, Michael McCarthy to Bloomberg Television.

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Photo by - Leonid Mamchenkov

The Cypriot government is reportedly working on a levy reduction from 6.7% to 3% for deposits under 100,000 euros. Anything above this amount would be taxed between 9.9% to 12.5%, according to a Reuters source close to the consultations.

With many Russian-controlled bank accounts on the island, Russian President Vladimir Putin called the levy “unjust, unprofessional and dangerous,” reports Reuters.

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A Ukrainian soldier crouches in a snowed-in trench on the frontlines.

A Ukrainian soldier crouches in a snowed-in trench on the frontlines. Major snowstorms sweeping Ukraine since Sunday have killed at least 10 people across the country.

Anne-Sophie Goninet, Valeria Berghinz and Bertrand Hauger

👋 އައްސަލާމު ޢަލައިކުމް*

Welcome to Tuesday, where more hostages and prisoners are expected to be exchanged as the Gaza ceasefire is extended for 48 hours, Indian rescuers are ready to extract the 41 workers trapped in a tunnel since Nov. 12, and the first green transatlantic flight takes off. Meanwhile, Manuel Brug in German daily Die Welt looks at how the emergence of trans performers and storylines in modern opera follows in the genre’s long history of playing with the idea of gender.

[**Assalaamu alaikum - Dhivehi, Maldives]

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